Question
In: Finance
You possess a $1,000 bond having a 5% coupon rate with 20 years to maturity and...
You possess a $1,000 bond having a 5% coupon rate with 20 years
to maturity
and the current interest rate is 9%. Interest is paid
annually. What is the
current market price for this bond? Then 15 years elapse, what is
the current
price of the bond if everything else stays the same?
Solutions
jeff jeffy answered 1 year agoRelated Solutions
A bond with a $1,000 par, 4 years to maturity, a coupon rate of 5%, and...
A bond with a $1,000 par, 4 years to maturity, a coupon rate of
5%, and annual payments has a yield to maturity of 4.3%. What will
be the percentage change in the bond price if the yield changes
instantaneously to 4.9%?
(Bonds) A bond with a $1,000 par, 4 years to maturity, a coupon rate of 5%,...
(Bonds) A bond with a $1,000 par, 4 years to maturity, a coupon
rate of 5%, and annual payments has a yield to maturity of 4.2%.
What will be the percentage change in the bond price if the yield
changes instantaneously to 4.6%? (If your answer is, e.g., -1.123%,
enter it as -1.123. If the sign of the price change is incorrect,
no credit will be given.)
Bond A is a $1,000, 6% quarterly coupon bond with 5 years to maturity. (a) If...
Bond A is a $1,000, 6% quarterly coupon bond with 5 years to
maturity.
(a) If you bought Bond A today at a yield (APR) of 8%, what is
your purchase price? Is this a
premium or discount bond? Why?
(b) One year later, Bond A's YTM (APR) has gone down to 6% and
you sell it immediately after
receiving the coupon.
(i) What is the current yield?
(ii) What is the capital gains yield?
(iii) What is the one-year...
Bond A is a $1,000, 6% quarterly coupon bond with 5 years to maturity. (a) If...
Bond A is a $1,000, 6% quarterly coupon bond with 5 years to
maturity. (a) If you bought Bond A today at a yield (APR) of 8%,
what is your purchase price? Is this a premium or discount bond?
Why? (b) One year later, Bond A's YTM (APR) has gone down
to 6% and you sell it immediately after receiving the coupon. (i)
What is the current yield? (ii) What is the capital gains
yield? (iii) What is the one-year...
Bond A Bond B Maturity (years) 20 30 Coupon rate (%) 12 8 Par value $1,000...
Bond A
Bond B
Maturity (years)
20
30
Coupon rate (%)
12
8
Par value
$1,000
$1,000
If both bonds had a required rate of return of 10%, what
would the bonds’ prices be?
Explain what it means when a bond is selling at a
discount, a premium, or at its face amount (par value). Based on
results in part (a), would you consider both bonds to be selling at
a discount, premium, or at par?
A $1,000 par-value bond with 5 years of maturity pays a 5% coupon rate, paid annually....
A $1,000 par-value bond with 5 years of maturity pays a 5%
coupon rate, paid annually. What is the value of the bond if your
required rate of return is 5%?
2. A $1,000 par-value bond with 5 years of
maturity pays a 5% coupon rate, paid semi-annually. What is the
value of the bond if your required rate of return is 5%?
3. A $1,000 par-value bond with 5
years of maturity pays a 5% coupon rate, paid semi-annually. What...
1. A $1,000 par-value bond with 5 years of maturity pays a 5% coupon rate, paid...
1. A $1,000 par-value bond with 5 years of maturity pays a 5%
coupon rate, paid annually. What is the value of the bond if your
required rate of return is 5%?
2. A $1,000 par-value bond with 5 years of maturity pays a 5%
coupon rate, paid semi-annually. What is the value of the bond if
your required rate of return is 5%?
3. A $1,000 par-value bond with 5 years of maturity pays a 5%
coupon rate, paid...
A $1,000 bond with a coupon rate of 5% paid semi-annually has 7 years to maturity...
A $1,000 bond with a coupon rate of 5% paid semi-annually has 7
years to maturity and a yield to maturity of 9%. The price of the
bond is closest to $________. Input your
answer without the $ sign and round your answer to
two decimal places.
A $1,000 bond with a coupon rate of 5% paid semi-annually has 10 years to maturity...
A $1,000 bond with a coupon rate of 5% paid semi-annually has 10
years to maturity and a yield to maturity of 7%. The price of the
bond is closest to $________. Input your
answer without the $ sign and round your answer to
two decimal places.
A $1,000 bond with a coupon rate of 5% paid semi-annually has 8 years to maturity...
A $1,000 bond with a coupon rate of 5% paid semi-annually has 8
years to maturity and a yield to maturity of 9%. The price of the
bond is closest to $________. Input your answer without the $ sign
and round your answer to two decimal places.
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